You need a talent philosophy (Guest Commentary)

Organizations without one are at mercy of inconsistent managers
By Marc Effron
|Canadian HR Reporter|Last Updated: 09/09/2013

Does your company have clear guidelines for how long it’s OK to be an average performer? Is there consensus among your executive team about how much to differentiate an investment in high-performing employees compared to average employees?

Would you say your organization has a consistent approach for how transparent it is with leaders about their potential to advance?

If you answered “no” to those questions, you’re not alone. Less than one-third (30 per cent) of 121 companies surveyed by New York-based Talent Management Group had firm-wide guidelines for how talent should be managed. Even at the few firms with guidelines, many were more platitudes than actual operational parameters.

The need for a philosophy

A company’s explicit or implicit answers to the questions above comprise its talent management philosophy — its “rules of the road” for managing talent. Given that few companies have an explicit talent philosophy, managers’ individual preferences often guide how a company invests in and manages employees.

Depending on the manager, a high-potential employee might be aggressively developed and rewarded or receive just a token recognition of her ability. A high-performing employee with less than perfect behaviours might be quickly promoted by one manager or held back by another.

If an organization is trying to build specific capabilities or deliver a consistent employee experience, the lack of a talent philosophy undermines those efforts.

Without an explicit philosophy, employees will infer the company’s rules of the road by observing how talent-related decisions are made. It’s not likely their assessment will give your company the benefit of the doubt.

Companies without a clear talent philosophy face potentially serious consequences including:

• increased high-potential turnover: The highest potential leaders will be especially sensitive to a lack of transparency about their future. They won’t whine about not knowing — they’ll just leave.

• decreased engagement: Engagement will take a hit if managers aren’t accountable for developing their teams or bad behaviours are left unchecked.

• expanding capability gaps: Managers will rely on their personal preferences to guide how they manage and grow their teams. This “random walk” approach will never build the quality or depth of talent a company requires.

Creating a philosophy

A company’s approach to managing talent is defined by five elements:

• performance: What are the consequences of higher or lower employee performance?

• behaviours: How much do behaviours matter and at what threshold do we start to care?

• differentiation: How should we allocate our company’s resources and rewards across varying levels of performance and potential?

• transparency: How open should we be, and with whom, about our talent processes and outcomes?

• accountability: To what extent should managers be responsible for the execution of talent-building processes?

It’s a straightforward process to develop and implement a talent management philosophy:

Get senior team input, consensus: Survey executives to understand their view on these five areas, using the sample questions in the sidebar on this page. Present the data to the team and have them agree on each talent philosophy area. It’s not critical to have perfect alignment, as long as each executive agrees to manage his group consistent with the team’s decisions.

Conduct a reality check: It’s easy to give socially desirable responses when asked talent philosophy questions, so it’s important to confront executives with real-world implications. For example, that “steady Eddie” finance director with the great attitude and two kids in college? He’s been here 15 years, never received more than the middle performance rating and has little possibility of promotion. Your proposed rules say he’s out in a year unless his performance or potential improves. Is everyone OK with that?

Build HR processes and communicate to employees: Once you’ve agreed on the rules, modify your HR processes to enable them. Talent review, succession, development and compensation processes all likely require adjustments to consistently support your new philosophy.

Finally, and most importantly, transparently communicate the new guidelines. Managers need to understand your company’s expectations for how they should manage talent and the consequences of doing that well or poorly. Employees need to know what the rules are for succeeding at your organization.

Marc Effron is president of the New York-based Talent Strategy Group. He will be speaking in Toronto on Sept. 18 at the Strategic Talent Management Forum. For more information about the event, visit www.scnetwork.ca.


Getting answers

Talent philosophy

Questions to ask

How would your executive team respond to these questions?

Performance: How long is it OK to be an average performer at our organization today? How long should it be in the future?

Behaviours: To what extent do a manager’s behaviours impact her career progress and compensation today? How much should they in the future?

Differentiation: How much larger of an investment do we make in our highest potential leaders compared to an average potential leader? What should this difference be in the future?

Transparency: How transparent are we with employees about their career potential at our organization? How transparent should we be?

Accountability: How accountable are managers today for increasing their team’s engagement? How accountable should they be?

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